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World’s top companies risk missing out on SDG business opportunities

World’s top companies risk missing out on SDG

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World’s top companies risk missing out on SDG business opportunities

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World’s top companies risk missing out on SDG business opportunities

KPMG study assesses the Corporate Responsibility reporting on Sustainable Development Goals (SDGs) set by the United Nations (UN)

Only 13% of Malaysian Top 100 companies are aligned to the UN SDGs

PETALING JAYA, 5 March 2018 – Most of the world’s leading companies are not reporting the business case for taking action on the UN’s Sustainable Development Goals (SDGs), according to a new study from KPMG International.

The study – entitled How to report on the SDGs: What good looks like and why it matters – reviews corporate reporting on the SDGs from the world’s largest 250 companies (G250) and assesses it against nine SDG reporting quality criteria.

KPMG’s research also finds that within two years of the SDGs being launched in 2015, four in ten (40 percent) top companies acknowledged the global goals in their corporate reporting. Of these, 84 percent identified the SDGs they consider most relevant to their business.

However, less than one in ten has reported a business case for action on the SDGs (8 percent) or has set specific and measurable (SMART) business performance targets related to the global goals (only 10 percent).

Adrian King, lead author of the study and KPMG’s Global Lead for Sustainability Reporting & Assurance, said:

“There are huge business opportunities inherent in tackling the world’s toughest problems, but so far only a handful of big companies have shown they understand that. These few leaders stand to benefit from recognizing the SDGs as a powerful catalyst for the innovation, partnerships and market transformations that build businesses. They will also be at an advantage when communicating with the many investors, governments and other stakeholders who are taking an increasing interest in the contribution of business to the SDGs.”

Other key findings from KPMG’s study include:

The SDGs most commonly prioritized by leading companies are Climate Action (SDG13), Decent Work & Economic Growth (SDG8) and Good Health & Wellbeing (SDG3)

Three quarters (75 percent) of companies that report on the SDGs discuss the impact their business has on the goals, but reporting is largely unbalanced with most companies discussing their positive impacts but not the negative

Only one in five reporting companies reports on any of the 169 individual SDG targets set by the UN

Within Malaysia, a review found that only 13% of the top 100 companies by revenue in Malaysia who reported on their corporate sustainable performance incorporated the SDGs in their corporate responsibility reporting.

Kasturi Nathan, Head of Governance & Sustainability at KPMG in Malaysia, opines that there is room for improvement but is confident that more companies will align their sustainability efforts to the SDGs.

“Through transformation programs and policies such as the TN50, the government is moving towards sustainable living by aiming to be a low-carbon society as well as creating an interconnected and responsible society. Hence, it is anticipated that more companies in Malaysia will take the initiative to affiliate their sustainability efforts to the UN goals,” said Kasturi.

She added that the companies who aligns themselves to the SDGs stand to gain the business benefits in the long run.

“Companies today are increasingly seen to be demonstrating their commitment towards responsible business practices. Shareholders and the society at large expect more accountability from businesses, and those who disregard this importance will likely have to contend with negative perceptions and reputational damage,” cautioned Kasturi.

Notes to the editor:

How to report on the SDGs: What good looks like and why it matters is intended to help companies that are unsure about how to report on the SDGs, where to start and what good SDG reporting looks like.

It proposes quality criteria for SDG reporting which readers can use as a guide for their own organization's reporting. It also analyzes how reporting from the world's 250 largest companies measures up against these criteria to help readers benchmark their own reporting against this global leadership group.

The research sample represents the world’s top 250 companies by revenue as defined by the Fortune Global 500 ranking of 2016.

Initial research was carried out by sustainability professionals at 49 KPMG member firms who reviewed reporting by the top 100 companies in their country as part of the research for the KPMG Survey of Corporate Responsibility Reporting 2017 (published October 2017). Sustainability Services professionals at KPMG in India subsequently conducted deep dive analysis of the SDG reporting practices by the G250.

The analysis was based on a review of public reporting in annual financial accounts, websites, corporate responsibility (CR) and sustainability reports and standalone SDG reports published between 1 July 2016 and 30 June 2017.

About KPMG

KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 154 countries and territories and have 200,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.